The Empirical Study On The Relationship Between Audit Committee Characteristics And Accounting Information Quality

Audit committee is one of the most important part in the company’s governance structure, one of the obligation of which is to hire external auditor and communicate with it,then to check the disclosure financial information. The purpose of this obligation is to pass on high quality accounting information to the investors or potential investors of the capital market who make their dicisions on the basis of the given information. The information is also very essential to the regulatory authorities and capital market. Audit committee has been existed in western countries for more than fifty years while it has been for nearly ten years in our China. The issue that how well the audit committee is working is very attractive to many scholars. This thesis is to study the issue on the basis of the following reasons, although some scholars studied before. The reasons are described as followings:1. The research before had conclusion through the data before 2008. The world economic crisis happened in 2008, the thesis want to use new datas to get new finding;2. The thesis select four characteristics as the research object. They are independence, specialization, diligence and gender among which gender is studied for the first time as audit committee characteristic. The thesis want to gain something valuable from the research.3. The adjusted DD model is used to represent the accounting information quality which is more persuasive than generally used Jones model or adjusted Jones model. The thesis is trying to obtain more persuasive conclusion about the relationship between audit committee characteristics and accounting information quality.This thesis’s theme is the empirical research of the relationship between audit committee characteristics and accounting information quality in order to examine the working efficiency of the audit committee. The thesis is divided into seven chapters which are described as follows:The first chapter is introduction. There are four parts in this chapter. They are the reason why the author choose the theme, the content and the structure of this thesis, the study method and the possible innovation.The second part is literature recview the history of the audit committee. First of all, there are two parts in this chapter about literature:audit committee characteristics including independence, specialization, diligence and gender and a brief view of accounting information quality which are consist of two parts:what is accounting information quality and the method to measure it.Then, it also has two parts about the history of the audit committee. The first part is about the history of the audit committee in foreign countries, concluding the origin, the period of improvement and the newest things about audit committee. The second part is about the audit committee in our China.The third chapter is the theory analysis and hypothesis. The chapter first analysis the audit committee theorically from three aspects of Principal-Agent Theory, Contract Theory and Accountability theory. Then, the obligations of the audit committee is introduced.Based on the theory analysis and the obligation introduction, the thesis give out four hypothesizes which are illustrated as followings:1. The independence of the audit committee is verse associatiom with the accounting information quality.2. The specialization of the audit committee is verse associatiom with the accounting information quality.3. The diligence of the audit committee is verse associatiom with the accounting information quality.4. The accounting information quality will be higher when the audit committee has female representation.The fourth chapter is the design of the empirical research of the relationship between audit committee characteristics and accounting information quality. This chapter describes the variables including dependent variable, independent variable and control variable, sample companies and statistics software.In this thesis,936 datas are collected some of which are obtain by manpower. The study period is 2008—2009.The five chapter is the empirical analysis which is consist of descriptive statistics, relevance analysis, regression analysis and robustness analysis. Hypothesis 1 and Hypothesis 4 are confirmed.The six chapter is empirical results and policy advisement. The policy advisement is based on the empirical results. The last part of this chapter is the limitation of this study. In this thesis, the author raise three suggestions. They are 1. The regulatory authorities are suggested to encourage the listed company to hire female directors as the member of the audit committee and to require the company to reveal more information about the female directors in the financial statements.2. To increase the proportion of the independent director in the audit committee, the regulatory authorities can acquire the audit committee is consist of only independent director just as American does.3. The regulatory authorities should take measures to guarantee the competence of the member of financial background in the audit committee.The innovation of this thesis:1. The member gender of audit committee is originally studied. The thesis obtain the positive conclusion:the audit committee consist of female members can make accounting information quality higher.2. The adjusted DD model is used in the thesis to behalf of accounting information quality,which has more explanation power than other model such as Jones model.The limitation of the thesis:1. The number of sample companies is somewhat small that convince the results of the study is not so persuasive. Then the study period 2008—2009 is two short because of some objective reasons.2. The earning quality is different from the accounting information quality when the adjusted DD model is suitable for the earning quality.3. The thesis uses dummy variable to describe the gender characteristic that is can be more delicate.